Government Performance and Results Act Annual Performance Report
Mission, Values, and Goals of the Board of Governors
The mission of the Board is to foster the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems so as to promote optimal macroeconomic performance.
The following values of the Board guide its organizational decisions and its employees' actions.
- Public interest. In its actions and policies, the Board seeks to promote the public interest. It is accountable and responsive to the general public, the U.S. government, and the financial community.
- Integrity. The Board adheres to the highest standards of integrity in its dealings with the public, the financial community, and its employees.
- Excellence. The conduct of monetary policy, responsibility for bank supervision, and maintenance of the payment system demand high-quality analysis; high performance standards; and a secure, robust infrastructure. The pursuit of excellence drives the Board's policies concerning recruitment, selection, and retention of Board employees.
- Efficiency and effectiveness. In carrying out its functions, the Board is continually aware that its operations are supported primarily by public funds, and it recognizes its obligation to manage resources efficiently and effectively.
- Independence of views. The Board values the diversity of its employees, input from a variety of sources, and the independent professional judgment that is fostered by the System's highly valued regional structure. It relies on strong teamwork to mold independent viewpoints into coherent, effective policies.
The Board has six primary strategic goals with interrelated and mutually reinforcing elements:
- conduct monetary policy that promotes the achievement of the Federal Reserve's statutory objectives of maximum employment and stable prices
- promote a safe, sound, competitive, and accessible banking system and stable financial markets
- administer federal consumer financial protection laws that fall within the Board's statutory authority, including those designed to encourage regulated financial institutions to help meet the credit needs of their local communities
- foster the integrity, efficiency, and accessibility of U.S. payment and settlement systems
- provide oversight of the Reserve Banks
- foster the integrity, efficiency, and effectiveness of Board programs and operations
Role of Strategic Planning
Unlike most other government agencies, the Board's budget is not subject to the congressional appropriations process or to review by the Administration through the Office of Management and Budget. Rather, the Board establishes its own budget formulation procedures, conducts strategic planning to identify changes to its critical activities and the proper amount and allocation of resources to support its mission, and provides various reports to the Congress.
The Board, like the framers of the Federal Reserve Act, considers its budgetary independence directly relevant to independence in managing monetary policy. The Board believes that to maintain budgetary independence, it must demonstrate effective and efficient use of its financial resources. Resource management begins with a clear mission statement, identification of goals, a review of factors that might affect the long-term attainment of these goals, and consideration of possible responses to those factors. By establishing objectives to attain its goals and by identifying the resources needed to accomplish them, the Board develops a budget necessary to implement its strategic plan.
Strategic planning is a critical factor in ensuring the long-term effectiveness of Board operations and in minimizing its costs. Effectiveness is improved through timely identification of threats and through efforts to improve operational efficiency. Efficiency is increased by early identification of issues and timely responses.
As technological and other changes evolve and accelerate, planning is essential to the effective and efficient conduct of Board operations. A continuing challenge to government agencies in this regard is identifying the appropriate measures of performance. The Board's strategic planning effort recognizes the key distinctions between government and private-sector strategic planning efforts and measurement of those efforts.
Private-sector planning often relies on measures of cost and revenue derived from prices determined in competitive markets; the results of that planning are reflected in the ability of the private entity to prosper over time. The government does not have direct competition in certain areas and has a monopoly in others (conducting monetary policy, for example); establishing a comparable metric to costs and prices is therefore extraordinarily difficult. Moreover, the results are judged relative to public policy objectives embodied in law, which often are not readily measurable. The Board seeks to accomplish its mission effectively while creating the efficiencies that come from strategic planning, recognizing that analogies to the private sector are just that. The Board's central planning objective is oriented toward achieving efficiency and effectiveness specific to the functions it serves.
In this Section:
The Federal Reserve works closely with other regulators, the Congress, and the Administration to ensure that its responsibilities are carried out in a manner that best protects the stability of the nation's financial system and strengthens the U.S. economy. Following are some highlights of the Board's interagency coordination efforts.
Federal Financial Institutions Examination Council (FFIEC)
To promote uniformity in the supervision of financial institutions by the federal regulatory agencies, the Board participates in the FFIEC, a formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions and to make recommendations to the federal supervisory agencies. The FFIEC is composed of a Board governor, the Comptroller of the Currency, the director of the CFPB, the chairman of the Federal Deposit Insurance Corporation (FDIC), the chairman of the National Credit Union Administration (NCUA), and the chairman of the State Liaison Committee, representing state banking supervisors.
Financial Stability Oversight Council (FSOC)
The FSOC, which was established by the Dodd-Frank Act, is charged with a number of important duties, including monitoring and identifying emerging risks to financial stability across the entire financial system, identifying potential regulatory gaps, and coordinating financial regulatory agencies' responses to potential systemic risks. The FSOC is composed of the Secretary of the U.S. Department of the Treasury (Treasury) (serves as chairperson of the FSOC); the Chairman of the Federal Reserve Board; the heads of the Commodity Futures Trading Commission, CFPB, FDIC, Federal Housing Finance Agency, NCUA, Office of the Comptroller of the Currency (OCC), Securities and Exchange Commission (SEC); and an independent member with insurance expertise, appointed by the President and confirmed by the Senate.
Other Interagency Efforts
In addition to participating in the FFIEC and FSOC, the Board also works bilaterally with federal agencies to coordinate key initiatives, such as the Board's implementation efforts under the Dodd-Frank Act. For example, shortly after the Dodd-Frank Act was enacted in July 2010, the Board developed a transition team, headed by a Board governor, to provide technical assistance to Treasury in setting up the functions of the CFPB.4 The Board also worked with the Office of Thrift Supervision (OTS) to develop comprehensive plans relating to the transfer of the supervisory authority of the OTS for savings associations and their parent holding companies.5 The Board will continue to work closely and cooperatively with other federal agencies to develop several joint rules required under the Dodd-Frank Act.
4. On July 21, 2011, certain consumer protection functions designated by the Dodd-Frank Act were transferred from the Board and other banking agencies to the CFPB. Return to text
5. The Dodd-Frank Act transferred the OTS's responsibilities with respect to the supervision and regulation of savings and loan holding companies to the Board. The transfer of this authority occurred on July 21, 2011. Return to text